Retail sales decline during January
Retail sales fell 0.26% in January, the biggest decline in 11 months, but increased 5.4% year-over year, according to the National Retail Federation. (The NRF numbers exclude automobiles, gasoline stations and restaurants.)
The January numbers follow 5.1% unadjusted year-over-year growth in holiday sales during November and December, which was revised down slightly today from the 5.5% initially reported. December was revised to be down 0.1% from November seasonally adjusted.
“These numbers reinforce a positive start to 2018 that reflects ongoing consumer optimism brought about by solid economic fundamentals,” NRF chief Economist Jack Kleinhenz said. “Some observers are spinning this as a disappointing month, but you’ve got to keep in mind that we’re coming off one of the strongest holiday seasons in years. It’s also difficult to draw conclusions from month-to-month changes because of the huge seasonal-adjustment factors.”
The January results comes as NRF is forecasting that 2018 retail sales will increase between 3.8% and 4.4% over 2017.
Most economists were not worried by the January dip and noted that the fundamentals are still in place for steady retail growth.
“With jobs growth still strong, consumer confidence at an unusually high level and the recent tax cuts providing a one-off boost to disposable incomes this month, the near-term prospects for consumer spending remain fairly bright,” Andrew Hunter, U.S. economist for Capital Economics, told the AP.
Specifics from key retail sectors during January include:
- Online and other non-store sales were up 13.2% year-over-year and were unchanged from December.
- Furniture and home furnishings stores were up 6.6% year-over-year but down 0.4% from December seasonally adjusted.
- Building materials and garden supply stores were up 6% year-over-year but down 2.4% from December seasonally adjusted.
- Clothing and clothing accessory stores were up 3.1% year-over-year and up 1.2% from December seasonally adjusted.
- General merchandise stores were up 3% year-over-year and up 0.2% from December seasonally adjusted.
- Electronics and appliance stores were up 2.9% year-over-year and up 0.5% from December seasonally adjusted.
- Health and personal care stores were up 1.8% year-over-year but down 1.2% from December seasonally adjusted.
- Sporting goods stores showed the only year-over-year decrease, down 5.9% and also down 0.8% from December seasonally adjusted.
Sam’s Club launches free shipping, simplified membership structure
Sam’s Club is making changes as it looks to compete head-on with rivals Amazon and Costco.
The warehouse club chain is rolling out free shipping on “most of the items” sold online, including nearly every Member’s Mark private-label item, with no minimum purchase required, the retailer said in a blog on its website. The news comes one month after the retailer abruptly closed 63 stores, and said some of the shuttered locations would be turned into fulfillment centers.
Sam’s Club also added that its efforts will be supported by tighter supply chain operations. The company is on track to open its first e-commerce fulfillment center in Memphis, Tennessee, with the first packages expected to ship in early spring.
Looking ahead, the retailer plans to bolster this network “in the back-half of the year,” with more distribution centers. Other regions being considered for fulfillment centers include Texas, Central Florida, the Mid-Atlantic, Southern California, Chicagoland, and the Northeast.
“Our Memphis center will teach us a lot as we build out this new e-commerce supply chain,” Jamie Iannone, CEO, SamsClub.com and executive VP of membership and technology, said in the blog.
These new distribution centers will be augmented by up to 12 of the closed locations that will be converted into regional e-commerce fulfillment centers.
Sam’s Club is also “simplifying” its membership structure. Going forward, there will be two levels of membership: Club and Plus. Club (formerly Sam’s Savings) will be $45 a year, and Plus will be $100 annual fee. The company is also lowering the fee for additional Club memberships to $40.
These rates take a direct hit at Amazon, which charges $99 a year for its Prime membership. However, Sam’s Club’s new shipping program does not offer free two-day shipping.
Walgreens Flu Index heat map indicates season slow down
Oklahoma City continues to top the Walgreens Flu Index for the week ended Feb. 10, Walgreens stated Wednesday, followed by the Dallas area and Knoxville, Tenn. The most gains in flu incidence were found in the Newport News area of Virginia and Tennessee markets Nashville and Memphis.
But strictly judging by the coloring of Walgreens’ heat map, which last week was a sea of mostly oranges and reds, the national incidence of influenza illnesses may have reached its peak. Last week, the Centers for Disease Control and Prevention reported the percentage of doctor’s visits attributed to influenza-like activity topped out at 7.7%, which is the highest since the 2003/2004 season.
The top 10 Walgreens designated market areas with flu activity for the week ending Feb. 10 were:
- Oklahoma City;
- Dallas-Ft. Worth, Texas;
- Knoxville, Tenn.;
- El Paso, Texas (Las Cruces, N.M.);
- Tyler-Longview (Lufkin & Nacogdoches), Texas;
- Waco-Temple-Bryan, Texas;
- Little Rock-Pine Bluff, Ark.;
- Montgomery-Selma, Ala.;
- Tulsa, Okla.; and
- Shreveport, La.
The top 10 markets by flu activity gains for the week were:
- Nashville, Tenn.;
- Norfolk-Portsmouth-Newport News, Va.;
- Memphis, Tenn.;
- Evansville, Ind.;
- Omaha, Neb.;
- Shreveport, La.;
- Reno, Nev.;
- Youngstown, Ohio;
- Anchorage, Alaska; and
- Louisville, Ky.
The Walgreens Flu Index is a weekly report developed to provide state- and market-specific information regarding flu activity, and ranks those states and markets experiencing the highest incidences of influenza across the country. The Flu Index provides insight by showing which cities or metropolitan areas are experiencing the most incidences of influenza each week based on Index methodology. The data does not measure actual levels or severity of flu activity.
The Walgreens Flu Index is compiled using weekly retail prescription data for antiviral medications used to treat influenza across Walgreens and Duane Reade locations nationwide, including Walgreens locations in Puerto Rico. The data is analyzed at state and geographic market levels to measure absolute impact and incremental change of antiviral medications on a per store average basis, and does not include markets in which Walgreens has fewer than 10 retail locations.